Living donors can claim tax benefits

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The world is full of secret heroes — everyday people who silently put more good into the world. Some perform everyday acts of kindness. Others save lives through organ donation. A generous offering that sometimes results in physical and financial challenges for the donor.

From a tax perspective, living donors may qualify for resources to ease that financial burden. Out-of-pocket expenses might be eligible for tax breaks, either as donor-specific, state-level credits and deductions, or as itemized medical write-offs on federal tax forms.

At TaxAct, we want to make sure that everyone takes advantage of each deduction earned — especially those of you who are out there saving lives.

Organ donation is exactly that: A donation

Because we don’t put price tags on organs in the United States, there’s no value amount to include under charitable donations. Those associated expenses, however, still count as medical costs on your taxes. If you benefit from itemizing you can claim out-of-pocket medical bills racked up during the donation process.

Things to keep in mind

  • Medical expenses have a “floor,” meaning your out-of-pocket costs must equal at least 7.5% of your adjusted gross income (AGI) to qualify. If you’re eligible and would benefit from itemization, you’ll file this at the top of Schedule A (Form 1040).
  • You must choose between taking the standard deduction or itemizing, you cannot take both. In recent years the standard deduction nearly doubled, making it more beneficial to most people. Still, if you have extremely high medical bills, it makes sense to check the math each way. TaxAct will walk you through that process, step-by-step, so you feel confident knowing you made the right choice.
  • If you’re donating, discuss insurance options with your recipient as well. Some private insurance companies offer benefits that may extend to cover some of your costs, including travel and lodging.

Additional credits or deductions vary state-by-state

As far as organ donation-specific tax initiatives, Idaho, Louisiana, Maryland and Utah all offer Tax Credits. In Idaho, you can claim a credit up to $5,000 for yourself, spouse, or a dependent, to cover all unreimbursed expenses for organ or bone marrow donation. In Utah, it’s up to$10,000 and specifically mentions lost wages, lodging, and cost of travel. If you’re saving lives in these states, we’ll help make sure you know what’s available to you.

Fifteen other states offer tax deductions, with varied requirements. For example, in Virginia you can take up to a $5,000 tax deduction for unreimbursed out-of-pocket expenses that arose within 12 months of the donation. Deductions in some other states go up to $10,000 and don’t have a specific time period attached. 

Federal employees are eligible for paid leave

This may not apply to your taxes, but If you work for the federal government, time to heal is already in place. Federal employees may take 30 days a year of paid leave for donating organs or seven for donating bone marrow.

It takes a lot of courage to be an organ donor. And while TaxAct can’t help your physical healing, we can make sure you claim any financial assistance that’s baked into the tax code. After all, the world needs more heroes.

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